EPCA '12: Egypt freezes 15% PP import duty from GCC indefinitely

07 October 2012 17:30[Source: ICIS news]

BUDAPEST (ICIS)--The Egyptian government has frozen the recently-imposed 15% import duty on polypropylene (PP) from the gulf cooperation council (GCC) for an indefinite period, an Egyptian supplier said on Sunday.

“They [GCC PP producers] can bring in product and they don’t have to pay the 15% duty until further notice,” the source said on the sidelines of the 46th annual European Petrochemical Association (EPCA) meeting.

The government decision has come in the wake of the plant shutdown at Egyptian Propylene and Polypropylene Co (EPPC), the chief local PP supplier for Egyptian converters.

EPPC’s PP plant in Port Said has a production capacity of 350,000 tonne/year, according to ICIS plants and projects, and supplies mostly homopolymer PP to the Egyptian market.

Egypt's Ministry of Industry and Foreign Trade had been expected to respond this month to a report challenging the 15% import duty, submitted by a group of GCC producers on 3 September.

Instead, it has decided to freeze the import duty as the PP plant at EPPC is expected to restart only by the second half of October, the supplier source said.

The GPCA industry group had previously made it clear the new levy was not in accordance with WTO rules and regulation and is negatively affecting the Egyptian conversion sector, which has opposed the measure.

PP exported by GCC producers had become unattractive to Egypt buyers after the Egyptian government set the import duty on PP for a period of 200 days starting 5 Jun 2012.

EPPC currently produces homopolymer PP which is mainly used in the agricultural sector. It is one of the two PP producers in Egypt, the second being Oriental Petrochemicals Co (OPC).